Saving Stuyvesant Town: How One Community Defeated the Worst Real Estate Deal in History

By Daniel R. Garodnick

From city streets to City Hall and to Midtown corporate offices, Saving Stuyvesant Town is the incredible true story of how one middle class community defeated the largest residential real estate deal in American history. Lifetime Stuy Town resident and former City Councilman Dan Garodnick recounts how his neighbors stood up to mammoth real estate interests and successfully fought to save their homes, delivering New York City's biggest-ever affordable housing preservation win.

In 2006, Garodnick found himself engaged in an unexpected battle. Stuyvesant Town was built for World War II veterans by MetLife, in partnership with the City. Two generations removed, MetLife announced that it would sell Stuy Town to the highest bidder. Garodnick and his neighbors sprang into action. Battle lines formed with real estate titans like Tishman Speyer and BlackRock facing an organized coalition of residents, who made a competing bid to buy the property themselves. Tripped-up by an over-leveraged deal, the collapse of the American housing market, and a novel lawsuit brought by tenants, the real estate interests collapsed, and the tenants stood ready to take charge and shape the future of their community. The result was a once-in-a-generation win for tenants and an extraordinary outcome for middle-class New Yorkers.

Garodnick's colorful and heartfelt account of this crucial moment in New York City history shows how creative problem solving, determination, and brute force politics can be marshalled for the public good. The nine-year struggle to save Stuyvesant Town by these residents is an inspiration to everyone who is committed to ensuring that New York remains a livable, affordable, and economically diverse city.

• Language: English
• Publisher: Three Hills
• Release date: Apr 15, 2021
• ISBN: 9781501754395

Book preview

SAVING STUYVESANT TOWN

How One Community Defeated the Worst Real Estate Deal in History

DANIEL R. GARODNICK

THREE HILLS

AN IMPRINT OF

CORNELL UNIVERSITY PRESS

ITHACA AND LONDON

To the tenants of Stuyvesant Town and

Peter Cooper Village for never giving up

and to my most favorite neighbors,

Mom, Dad, Zoe, Asher and Devin

CONTENTS

Character List

Prologue: Middle Class on the Brink

1. Activism from the Start

2. Time for a Tenants Association

3. An Unexpected Challenge

4. Making a Bid

5. Regrouping after the Loss

6. Pushing Back against a New Owner

7. Preparing for an Uncertain Future

8. Suddenly the Prettiest Girl at the Dance

9. Finding a Partner

10. Challenged from the Outside

11. Under Water, Actual Water

12. A New Start

13. The Mayor Comes Over for Cannoli

14. Closing the Deal

Epilogue: Loopholes Closed

Acknowledgments

Notes

Index

CHARACTER LIST

Bill Ackman is an activist hedge fund manager and CEO of Pershing Square Capital Management, which along with Winthrop Capital sought to partner with the Stuyvesant Town tenants.

Justine Almada was one of the first members of my city council staff, who served as my liaison to Stuyvesant Town and later became my chief of staff.

Michael Ashner is the chairman and CEO of Winthrop Realty Trust, which along with Bill Ackman’s Pershing Square Capital sought to partner with the Stuyvesant Town tenants.

Charles Bagli is a New York Times reporter who closely covered the Stuyvesant Town story.

Barry Blattman is vice-chair of Brookfield Asset Management, which partnered with the Stuyvesant Town Peter Cooper Village Tenants Association in making a bid to CWCapital in 2012.

Rafael Cestero served as commissioner of the New York City Department of Housing Preservation and Development (HPD) from 2009 to 2011 under Mayor Michael Bloomberg.

John Crotty is a resident, housing expert, and key behind-the-scenes player in the tenants’ effort to control their destiny in Stuyvesant Town.

Al Doyle is a lifelong resident of Stuyvesant Town and was the longest-serving president of the Stuyvesant Town Peter Cooper Village Tenants Association, from 1989 to 2012.

Soni Fink was the outspoken board member who was the communications director of the Tenants Association for over a decade.

Alicia Glen served as deputy mayor for economic development in the de Blasio administration from 2014 to 2019.

Jon Gray is president and chief operating officer of the Blackstone Group and was a critical force behind the acquisition of Stuyvesant Town and Peter Cooper Village in 2015.

Leonard Grunstein was a partner at Troutman Sanders who represented the Stuyvesant Town Peter Cooper Village Tenants Association in its bid to buy the property in 2006.

Gerald Guterman is a real estate developer and investor. He is one of the largest multifamily apartment owner/operators and condominium converters in the United States.

Doug Harmon is a leading real estate broker who helped to negotiate the sale of Stuyvesant Town from CWCapital to Blackstone in 2015.

David Iannarone is chief executive officer of CWCapital, the special servicer for Stuyvesant Town from 2010 to 2015.

Meredith Kane is a partner at the New York law firm of Paul Weiss Rifkind Wharton & Garrison LLP and represented the Stuyvesant Town Peter Cooper Village Tenants Association.

Maura Keaney served as deputy chief of staff to city council speaker Christine Quinn.

David Kimball-Stanley served as my district office chief of staff.

Ilona Kramer served as my chief of staff.

Andrew MacArthur served as a managing director of CWCapital Asset Management and was a prime antagonist of, and ultimately partner to, the Stuyvesant Town Peter Cooper Village Tenants Association.

John Marsh is a lifelong resident of Peter Cooper Village, one of the community’s best organizers, and served as president of the Stuyvesant Town Peter Cooper Village Tenants Association from 2012 to 2015.

Nadeem Meghji is a senior managing director of the Blackstone Group and a chief negotiator of the 2015 deal with the tenants and the city.

Genevieve Michel served as my chief of staff.

James Patchett served as chief of staff to New York City deputy mayor for economic development Alicia Glen.

Adam Rose is copresident of Rose Associates, a property management firm, which managed Stuyvesant Town and Peter Cooper Village on and off for nearly a decade.

Jim Roth served as a board member of the Stuyvesant Town Peter Cooper Village Tenants Association.

Alex Rubin is a managing director of Moelis & Company, who represented the Stuyvesant Town Peter Cooper Village Tenants Association.

Steven Sanders grew up in Stuyvesant Town, worked for the local assemblyman Andrew Stein, and then succeeded him in the State Assembly. Sanders served as the assemblyman for Stuyvesant Town from 1978 to 2006.

Alex Schmidt was a partner at Wolf Haldenstein, a law firm that represented the tenants in the Roberts case, a class action against both MetLife and Tishman Speyer for illegally taking apartments out of rent stabilization.

Zoe Segal-Reichlin is my wife.

John Sheehy is a longtime resident of Peter Cooper Village and joined the board of the Stuyvesant Town Peter Cooper Village Tenants Association in 2010.

Jen Shykula is an organizer at the public strategy firm Berlin Rosen.

Charles Spetka is chief executive officer of CW Financial Services, which was the special servicer for Stuyvesant Town from 2010 to 2015.

Andrew Sullivan served as the campaign manager of my 2005 city council campaign and became my first chief of staff.

Rob Speyer is president and chief executive officer of Tishman Speyer, which bought Stuyvesant Town in 2006 and defaulted on its loans in 2010.

Susan Steinberg joined the board of the Stuyvesant Town Peter Cooper Village Tenants Association in 1998 and became its president in 2015.

Marianna Vaidman Stone served as my senior policy adviser.

Prologue

MIDDLE CLASS ON THE BRINK

Six and a half months into my first term as a New York City councilman, about 20 percent of my district went up for sale. Needless to say, this doesn’t usually happen.

Built by the Metropolitan Life Insurance Company as housing for veterans returning from World War II, Stuyvesant Town and Peter Cooper Village is the largest rental community in the United States and home to about thirty thousand mostly middle-class people on the East Side of Manhattan.¹ A stone’s throw from the East Village, the Flatiron Building, and Gramercy Park, for nearly sixty years Stuyvesant Town and Peter Cooper Village had stood as a beacon for middle-income New Yorkers, a place to enjoy a stable and affordable life in the heart of Manhattan. The redbrick buildings are uniform and pedestrian—to many outsiders, they resemble public housing. But under the care of Mother Met, as Metropolitan Life, or MetLife, was known to tenants, and protected by rent-stabilization laws that provided for stable and affordable rents, it was designed to resemble suburban living, where people could raise their kids, build a community, and grow old in peace. Residents tended to stay for decades.

Then, in July 2006, at the height of the real estate boom, MetLife announced that it would put it all up for sale. Its marketing materials emphasized the opportunity for a new owner to transform the drab and nondescript buildings into a luxury product, and the opportunity to own eighty acres in Manhattan caused the real estate world to go crazy. In October 2006, bidders from across the globe participated in a white-hot auction that bid the property over $5 billion—billions more than what experts had been predicting. To the real estate developers, Stuy Town and Peter Cooper had the potential to be the biggest residential deal ever consummated and a source of enormous profit for years to come. To the people who lived there—many for decades—the message was clear: their stable, middle-class community was on the brink.

When the dust settled on the bidding in October 2006, Tishman Speyer Properties and BlackRock emerged as the winners, paying a record-shattering $5.4 billion in a deal that in fact went down in the books as the largest residential real estate transaction in US history. Despite public pressure to do so, the new owners had no interest in making a commitment to the long-term preservation of affordable housing in Stuyvesant Town beyond what the law already required. To many in the real estate community, and even to Mayor Michael Bloomberg, that was more than enough. Unfortunately, it was clear to many of us that a sale of this magnitude could only be justified with a business plan that would seek to drive up rents and drive out existing tenants.

Almost immediately, our fears were confirmed. Tishman Speyer wasted no time in attempting to usher in a new era of luxury to this largely middle-class community. The new owners hung luxury rentals banners on the sides of the redbrick buildings. They closed the local supermarket and replaced it with a gym. They offered new amenities—for a fee—that could attract younger tenants, and hosted rock concerts in the middle of Stuyvesant Oval. But most significantly, Tishman Speyer tried to push out existing tenants in order to increase rents on new tenants who moved in. They had borrowed $4.4 billion to buy Stuy Town and had to find a way to generate more revenue from the property to pay back their enormous debts.

Most of the units in Stuy Town were protected by rent stabilization, which is a state law that limits the amount of rent increases the landlord could apply to the units. But the law allowed for the owner of rent-stabilized units to make upgrades to a vacant unit, and to apply a portion of the cost of those improvements to the legal rent. Once the monthly rent was over $2,000, an owner was allowed to take the unit out of rent stabilization and charge any amount for it. That meant that in Stuy Town the remaining lower-rent, rent-stabilized tenants were the prime obstacle to Tishman Speyer getting rental income up and allowing the firm to repay its debts. Tishman Speyer and BlackRock’s deal would fail unless they got these people out of their units, and fast. Legal notices, many with flimsy allegations, rained down on longtime, perfectly legitimate tenants, putting them on notice that they were going to be evicted and creating an atmosphere of fear among the tenant community. The tenants were suddenly in a battle that they did not want to fight.

For me, this was personal. I was not only the new city councilman for the area, but the people affected by this were my neighbors. I grew up in the neighborhood, an only child of a public school teacher and portfolio manager, and my formative years were spent in a two-bedroom apartment in Peter Cooper. My mother had moved into the community in the late 1960s, and once she got married to my dad, they never seriously considered leaving because it afforded them a reasonable and stabilized rent, beautiful grounds, and more space than they otherwise could afford in Manhattan. Over the years, I had developed a personal relationship with many of the people who now had a target on their backs. When I had run for public office the year before, questions about Stuyvesant Town were mundane and focused on the routine conflicts between landlords and tenants in a city housing development—like brown water, or rent increases. Now, the entire property was up for sale, and tenants’ futures were hanging in the balance.

Like me, the people of this community were invested in its stability as an affordable, middle-class neighborhood. The people who lived there—some had been there for the entire life of the community—were being treated as an afterthought by corporate titans, and, as the sale and its aftermath unfurled, they banded together to fight back. Over the course of a decade, the newly energized Stuyvesant Town Peter Cooper Village Tenants Association and I used every ounce of leverage that we could find. We assembled our own competitive bid to buy the property on behalf of the tenants themselves—and did it twice. We defended the interests of residents who found themselves subject to baseless legal claims, we litigated and won the biggest tenant victory in the New York Court of Appeals in a generation, and we were courted by nearly all the major real estate players across the globe. Ultimately we put ourselves in a position to strike a deal that would preserve thousands of units as affordable housing for the next generation of residents.

Our fight to save Stuyvesant Town faced significant obstacles, however, and not just from the real estate world. Mayor Bloomberg viewed the transaction as purely private in nature, and despite the city’s history of direct involvement in the creation of the community, he didn’t believe there was a continued role for the public to play in the sale. We were constantly challenged by Tishman Speyer and, when they defaulted, by a special servicer called CWCapital. We worked to navigate the shark-filled waters of New York real estate, with many viewing the Tenants Association as an active foe. Some residents also objected to the plans that the Tenants Association itself was advancing, either because they focused too much, or too little, on the long-term affordability of the community.

Moreover, public sentiment was not always on our side. Though MetLife historically had imposed a minimum income requirement for new tenants, there was no income cap for any resident. Accordingly, though most of the members of the community were middle class, some had more means, and all were paying below market rate for their units. If you are paying less than a third of your income in rent, the housing is, by formal definition, affordable to you. By 2000, the median household income in Stuy Town was $68,422, and the median monthly rent was $1,000. Those households were paying only about 18 percent of their income for rent, well below a third of the median income, making Stuy Town one of the few bargains left in Manhattan. To many, this appeared to be a relatively well-off community enjoying affordable housing while many others throughout the city struggled to make ends meet.²

However, others wisely saw the value of preserving a middle class in a city where the divide between the very rich and the very poor was growing. New York City in 2006 had the lowest percentage of middle-class residents of any of the hundred largest metropolitan areas in the United States. That posed risks for New Yorkers of all income levels. A Brookings study revealed that the absence of middle-income neighborhoods limits opportunities for upward mobility, making it tougher for lower-income people to move up the property ladder, to buy into safer neighborhoods, send their children to better schools, and even make the kinds of personal contacts that can be a route to better jobs.³

While many middle-class people who started their lives in New York City were ultimately priced out, the people who lived in Stuy Town generally were able to stay. Thanks to affordable prices and a stable, quiet community, they were able to work and raise their families in the heart of New York City, contributing to its vibrant nature. Were there some very wealthy people living in their midst, taking advantage of the system? Admittedly, in the context of rent stabilization, there are always some who will benefit from a program that is not intended for them. But people of great means ordinarily did not gravitate toward nondescript buildings without a doorman, and next to a major highway, just for a bargain. My own building when I was growing up included multiple public school teachers, a furrier, a literary agent, an accountant, a truant officer, and a former NYPD detective. Like my own parents, these were people who likely would have left the city but for the housing in Stuy Town and Peter Cooper that was affordable to them.

It also is important to recognize that part of our success in pushing back against real estate excesses was based on the very advantages that these middle-class people—and because of the community’s horribly racist origins, predominantly white middle-class people—had in contrast to more marginalized groups. We had an active, vocal, and well-connected constituency vested with an inherent privilege. Among us were top mayoral aides, prominent tenant advocates, and elected officials, past and present. While in the community’s very earliest days, residents challenged MetLife and won one of the most important civil rights victories in New York’s history to put an end to MetLife’s official whites-only policy, Stuy Town continues to be an overwhelmingly white neighborhood to this day. And while the vast majority of the community is still middle class, we have some more affluent neighbors among us as well. These were people who had moved in when they were just starting their careers but who had stayed—and some even later fought side by side with us to protect middle-class housing because they saw the importance of offering this opportunity to the next generation.

Against this backdrop, one might be tempted to have little sympathy for today’s Stuy Town residents. It is undeniably true that there are far needier communities in New York City. And yet it is also true that it is in the interest of all New Yorkers for the middle class to survive. Having a healthy middle class is critical to the economic growth and success of any city. This group relies on public services—like infrastructure and schools—and has an interest in demanding results that improve outcomes for all residents. Indeed, this group of residents used its power and energy to fight back against landlord excesses, to strengthen rent laws, and as a result created benefits for tens of thousands of New Yorkers. The tenants of Stuy Town represent New York’s middle class; their future is linked to the future of the city.⁴

The book is mostly told from my own perspective, informed by a decade of work on behalf of Stuyvesant Town and Peter Cooper Village tenants. I had the fortune of being the local city councilman during the period of time central to this story. I was present at nearly every meeting to plot the tenants’ strategy to respond to MetLife’s sale, to push back against Tishman Speyer’s aggressive behavior toward tenants, and to develop a solution that would ensure the long-term stability of this, my childhood home. I supplemented my own memory with interviews with many of the main players and also framed some of the details through press accounts. And a note for the reader: I often call Stuyvesant Town and Peter Cooper Village together just Stuyvesant Town or Stuy Town, to simplify matters.

This story starts with the development of Stuy Town by MetLife, with the strong support of Mayor Fiorello La Guardia and Robert Moses. To build on the eighty-acre site, the city used its power of eminent domain and gave MetLife a blank canvas, a tax abatement, and a guaranteed return on its investment that would last for twenty-five years. The city also blessed MetLife’s racist rental policies, which prohibited Black residents from getting an apartment. The story then shows how the tenants of Stuy Town used their organizing mettle to successfully push back against MetLife’s racism and to integrate the community. Twenty-five years later, the tenants again organized, this time to resist the impacts of an immediate rent hike when MetLife’s tax abatement was set to end. They banded together to form the modern Tenants Association and again won a critical victory by getting their rent protections extended. With MetLife’s sale in 2006, tenants faced another challenge: a new owner and an unknown future. The book focuses primarily on the period from the 2006 sale to the uncertain years following Tishman Speyer’s default in 2010 and the negotiated sale to the Blackstone Group in 2015. It tells the story of the Herculean efforts by leaders of this community to ensure that tenants’ interests would be protected.

It will answer the question of how the tenants of Stuy Town got from a place where they were being ignored by local government and threatened with eviction, to a place where the largest real estate entities in the world were not only fighting to join forces with us—but a new mayor would help us to deliver a once-in-a-generation win for tenants. This is the story of a community with a history of activism banding together to fight back against corporate greed and excess, and who forced the real estate community to ultimately conclude that working with the tenants would yield a better outcome than fighting them. The negotiations played out both in public and in private over many years, and the process was often choppy and sometimes bitterly contentious. The result was an extraordinary outcome for middle-class New Yorkers.

Figure 1.1. Stuyvesant Town and Peter Cooper Village sit between 14th and 23rd Streets east of First Avenue in Manhattan. The Empire State Building and Chrysler Building are in the background. Photo credit: Beam Living, Stuyvesant Town / Peter Cooper Village Archives.

Figure 1.1. Stuyvesant Town and Peter Cooper Village sit between 14th and 23rd Streets east of First Avenue in Manhattan. The Empire State Building and Chrysler Building are in the background. Photo credit: Beam Living, Stuyvesant Town / Peter Cooper Village Archives.

1

ACTIVISM FROM THE START

You can’t miss the wall of redbrick buildings that emerges out of the East Village on Manhattan’s East Side. The plain and unenticing facades of Stuyvesant Town and Peter Cooper Village carefully disguise the unique slice of city life that takes place within. Just inside, flower beds bursting with tulips line the paths connecting the buildings, sunbathers sprawl on lush grassy areas, and children play in fifteen well-maintained playgrounds. Young families come together for picnics on the lawn, teenagers fill the basketball courts, and elderly New Yorkers sit on benches, passing the day.

Its idyllic quality belies the tumultuous history that produced this middle-class enclave tucked in the midst of Manhattan. In reality, the history of Stuyvesant Town is anything but idyllic. Born of government-backed, and subsidized, racist policies and the displacement of poor New Yorkers, Stuyvesant Town’s roots are planted in bitter soil. But the history of Stuyvesant Town is punctuated by something else, too, which is deeply woven into the fabric of the community. From its earliest days, the story of Stuyvesant Town is also one of activism, where elected officials, civil rights leaders, and tenants joined together to fight—and in most cases ultimately win—against corporate greed and unjust policies, and for the rights of New Yorkers.

Stuyvesant Town emerged from a housing crisis in New York City that began during World War I. The war had placed a significant demand on manpower and materials, sending the cost of construction of new buildings through the roof; in the city, housing construction basically came to a halt. Between 1915 and 1919, the number of new apartments built in New York City dropped by 94 percent, at the same time that wartime prosperity was bringing many new families to the five boroughs. That combination of factors drove vacancy levels in the city to a staggeringly low .36 percent in April 1920. By contrast, the 2018 vacancy rate in New York City was ten times higher, at 3.63 percent, which is still considered a housing emergency. The result was that apartment units in the 1920s tended to be severely overcrowded, and the conditions were poor. Occupants of these units had no protection from sudden rent hikes, and eviction cases clogged the courts. With the support of the Socialist Party and its allied labor unions, tenants began to organize to demand reforms. Sometimes their advocacy took the form of rent strikes, and in other cases tenants directly challenged their landlords in court.¹

In an effort to stem the crisis, the New York State Legislature decided to offer incentives for the construction of new housing. Among those incentives was a program for insurance companies to build new housing for people of low and moderate means. The program—formalized in a 1922 law—allowed a municipality like New York City to offer insurance companies a ten-year tax exemption on new residential construction so long as rents for tenants did not exceed $9 per month per room. The Metropolitan Life Insurance Company, under the leadership of Frederick Ecker, decided to take advantage of this program. MetLife, as it came to be known, built 2,125 apartments in western Queens. Opened in 1924, the apartments proved to be popular, not only because of the reasonable rents, but also because they afforded certain comforts, like steam heat and hot water, which were not common for housing developments at the time.²

Things got harder for both tenants and landlords in the Great Depression years of the early 1930s, as many tenants could not pay their rents, landlords could not afford their mortgage obligations, and courts received a flood of eviction and foreclosure cases they did not even have the ability to enforce. In 1938, the state renewed its incentive program for new housing construction. This time, Ecker and MetLife took advantage of the incentives to build the Parkchester community in the East Bronx. Parkchester’s 171 buildings and 12,271 apartments were designed to be a parklike suburb, which opened in 1941. As MetLife expanded its housing portfolio, it was enjoying a high level of success, even earning a higher return on its Parkchester investment than on its own bonds and other core investments.³

Robert Moses, New York State’s powerful parks commissioner and city planning commissioner, working in concert with Mayor Fiorello La Guardia, had even bigger development plans in mind to address the crisis. He was determined to clear so-called slums for urban renewal and had his eye on building a large housing development on the East Side of Manhattan. Major projects like these were much more difficult in Manhattan than other places because a prospective developer not only needed to build the buildings but also usually had to first demolish existing ones—and that meant evicting the people who lived in them. In pursuit of his large-scale Manhattan project, Moses reached out to two of the biggest insurance companies already doing business in New York to gauge their interest in doing a development on the East Side. New York Life Insurance Company demurred, but MetLife, emboldened by its recent successes in Parkchester and in Queens, was ready to engage.

Moses initially offered MetLife a twenty-year property tax abatement for the new buildings—which was more generous than the ten years that had been guaranteed in the 1922 law—but would require MetLife to find new housing for the people who would be displaced. This was not good enough for MetLife, and Ecker pushed Moses for more benefits and fewer obligations. Eager to lock them in, Moses went to Albany to argue for a sweeter deal for MetLife. Moses emerged with a new package of incentives that included extending the tax exemption to twenty-five years and dropping any requirement that MetLife find replacement housing for the eleven thousand existing residents in the area from 14th to 20th Streets who were going to be forced to move. The law also set minimum income requirements for the future residents of the new development, in order to attract a higher social class of tenants. The resulting Hampton-Mitchell Redevelopment Companies Law of 1943 was tailored specifically to suit MetLife’s requirements.⁴

Green-lighted in Albany, the 1943 law also gave the city the right to confiscate the private homes of the people who lived at the site, for the benefit of MetLife’s development. City officials condemned eighteen blocks of this allegedly blighted land and sold it at cost to the Stuyvesant Town Corporation, a new branch of MetLife, named for Peter Stuyvesant, the Dutch governor of colonial New Amsterdam. (In the seventeenth century, Stuyvesant’s farm had occupied the site of the future development.) The city negotiated a contract that froze MetLife’s tax bill for twenty-five years at the low rate in effect for the area when the property was considered blighted, and gave MetLife the right to apply to the New York City Board of Estimate—which at the time was the city’s primary legislative body, operating alongside a less-powerful city council—to raise rents as necessary to guarantee MetLife a consistent 6 percent return on its capital investment.⁵

Mayor La Guardia made the announcement of his important plan for Stuyvesant Town in his regular radio broadcast on WNYC on April 18, 1943. It was front page news in the New York Times—above the fold—with the headline East Side Suburb in City to House 30,000 after War. This suburb was going to be designed to be separate and apart from the hustle of the city; Ecker described it as having a parklike atmosphere and a special emphasis on the recreational needs of children. To La Guardia the deal was not only vision, it is prudence and good business. Stuyvesant Town was unique in that it would create homes for thirty thousand people but would be built on only 30 percent of the entire lot. The rest would remain for landscaping, roadways, and open courts, in order to maximize light and air for residents. La Guardia also promised that people already living in the area did not need to worry about being forcibly dispossessed, at least not until after the war.⁶

The news surprised the eleven thousand low-income New Yorkers who lived in modest tenements in those blocks east of First Avenue and who had been given no prior warning or been consulted by La Guardia, Moses, or any local elected officials about this plan. A debate erupted about the seemingly private nature of the proposed development and the fact that it would displace people from their homes. One critic wrote, It will be a company-walled town with eight entrances, each marked private; at the company’s will any non-resident of the town could be barred from walking through the project. The streets within will obviously not be dedicated to the city but will be company owned and maintained. Robert Moses responded, saying that New Yorkers should support MetLife because it was the only company which has been willing to run the risk of undertaking a large rehabilitation project in wartime as a matter of public service.⁷

MetLife responded to the controversy over its plans by establishing a Tenant Relocation Bureau, with the stated purpose to help these soon-to-be displaced residents find new housing. Unfortunately for most of them, their prospects of moving into the future Stuyvesant Town were remote. The Community Service Society in 1945 interviewed 836 families in the neighborhood and concluded that only 3 percent of them had a reasonable hope of being rehoused in the future Stuyvesant Town. Twenty-two percent were looking to public housing as their next best option, and the remaining 75 percent must find shelter in other slum areas. To these disadvantaged New Yorkers, many of whom were recent immigrants, Stuy Town, despite its expected contribution to the public good of housing, added nothing but pain as it forced them to uproot their homes without any promise of improvement to their quality of life.⁸

MetLife’s physical plan was approved by the City Planning Commission, on which Moses sat as a member, on May 20, 1943, by a vote of 5 to 1. The lone dissenter, Lawrence M. Orton, cited the fact that the city was going to demolish an existing public school (and not replace it within the boundaries of Stuy Town) as the reason for his negative vote. Orton found it incredible that the children growing up in this new city in the city, which was to be the size of Jacksonville, Florida, would not have a school in its midst. Having secured approval of the physical design from the Department of City Planning, MetLife had to then persuade the powerful Board of Estimate to approve the terms of its proposed contract with the city. (At that time, all administrative actions like this, as well as laws passed by the city council, needed to be approved by the Board of Estimate.) The June 3, 1943, Board of Estimate hearing was a hotbed of dissent, as people learned that MetLife, while enjoying the benefits of tax incentives and condemnation, actually intended to deny Black people the opportunity to live in the future Stuyvesant Town. Assemblyman William Andrews read into the record a written exchange he had with George Gove, MetLife’s director of housing, who had said cryptically that no provision has been made for Negro families in Stuy Town. When Andrews asked MetLife administrators for clarification about what exactly that meant, he got a terse second letter, which said the original MetLife communication had been direct and explicit and requires no further clarification.⁹

At the Board of Estimate hearing in City Hall, Councilman Stanley Isaacs read aloud a quote that MetLife’s chairman, Frederick Ecker, had given to the New York Post: Negroes and whites don’t mix. Perhaps they will in a hundred years but they don’t now. Isaacs then turned directly to Ecker, who was sitting in the front row of the hearing at City Hall, and asked if he had been misquoted. As everyone watched uncomfortably, Ecker sat stone-faced and did not answer. Hearing the exchange between the elected officials and Ecker, Moses was infuriated by the politicians’ grandstanding and complicating his development plan with civil rights concerns. If you don’t want this contract, he huffed at the hearing, I can assure you that it will be the last opportunity we’ll have to attract private capital. It will mark the death knell of slum clearance by private enterprise. Moses continued: Those who insist on making projects of this kind a battleground for the vindication of social objectives, however desirable, and who persist in claiming that a private project is in fact a public project, obviously are looking for a political issue and not for results in the form of actual slum clearance.¹⁰

One member of the Board of Estimate, Borough President Edgar Nathan, attempted to table the project, but Moses and La Guardia pushed it through. The Board of Estimate approved the Stuyvesant Town contract on June 3, 1943, by a vote of 11 to 5. About a week after the vote, at a Negro freedom rally at Madison Garden, before a packed house, Adam Clayton Powell Jr.—a member of the New York City Council—demanded the impeachment of Mayor La Guardia because he allowed the city’s contract with MetLife to proceed. Clearly sensing that they were on the wrong side of a losing issue, the Board of Estimate soon thereafter passed a local law under which future projects receiving real estate tax relief would be barred from discriminating against applicants because of their race, color, or creed. But they declined to make this law applicable to Stuyvesant Town. It was official: MetLife had secured the government approvals it needed to proceed.¹¹

Almost immediately, advocates opposing segregation challenged the city’s approval of the Stuy Town contract in court on procedural grounds, but their suit was later dismissed. By February 1945, MetLife had formally filed its building plans and took to the task of vacating and demolishing the hundreds of four- and five-story tenements in what had become known as the Gas House District, because of the giant, circular gas storage tanks or gashouses that once existed there. It also took to removing several laundries, three churches, three schools, two theaters, and many small factory buildings that were relics of the Civil War. Hundreds of tenants were notified that they needed to vacate their buildings by March 31, 1945, to make way for this massive new development. Sidewalks in the community became cluttered with household goods as people prepared to move, and tenants, many with limited English proficiency, crowded MetLife’s relocation bureau seeking help. MetLife’s bureau had translators who spoke Polish, Russian, and Italian, who transported soon-to-be displaced residents across the city in a station wagon looking for new housing. The New York Times called it the greatest and most significant mass movement of families in New York’s history.¹²

But not all of the tenants were willing to go without a fight. The one hundred residents of one rent-protected building—called Stuyvesant House—held an emergency meeting in March 1945 at Stuyvesant High School, and objected to being evicted. They urgently called on Mayor La Guardia and Governor Dewey to keep MetLife from tearing down their building until after the war, as La Guardia had promised, or until 1946.¹³ La Guardia’s promises were meaningless now that the city had given MetLife the green light to proceed. In fact, this project, hailed by La Guardia and Moses as the pinnacle of public-spiritedness and the best way to achieve the city’s social objectives, suddenly had the feeling of a private real estate development project where the public was just in the way.

By May 1946, the Gashouse District was a vista of wrecked buildings and hills of debris.¹⁴ As the number of residents dwindled, those who remained watched as bulldozers demolished their neighbors’ former homes. In a little over a year, MetLife had successfully removed the residents and razed all the buildings. The last tenants, Mr. and Mrs. Harry Delman, and their ten-year-old son Gerald, moved out on May 5, 1946 (twenty-six years to the day before my own parents welcomed me into the world and brought me home to our Stuy Town apartment). The Delmans lived at 441 East 15th Street, an address that, because Stuy Town was designed as a single immense superblock, disappeared off the city grid forever.¹⁵

Meanwhile, thousands of people were lining up for a chance to occupy one of the future Stuy Town apartments. One day after MetLife announced that applications were open, it was flooded with seven thousand letters and telegrams for the 8,759 units that wouldn’t even be finished for another two years. MetLife had declared that veterans were going to have preference in the application process, and many of them in their letters described how they were struggling to find housing now that the war was over. Many were newlyweds and desperate to get out of their in-laws’ homes; others described how they wanted to get married but couldn’t because they had no place to live. By the time the first building was ready to be occupied on August 1, 1947, MetLife had received one hundred thousand applications.¹⁶

Figure 1.2. Early maps of Stuyvesant Town show the tower-in-a-park design, with buildings interspersed through ample green space, including an oval gathering area in the middle. This map shows the western two-thirds of Stuyvesant Town, between 14th and 23rd Streets, in contrast with the more densely situated buildings across First Avenue. The layout added to the feeling that this community was insulated from the rest of Manhattan. Photo credit: New York Public Library.

Figure 1.2. Early maps of Stuyvesant Town show the tower-in-a-park design, with buildings interspersed through ample green space, including an oval gathering area in the middle. This map shows the western two-thirds of Stuyvesant Town, between 14th and 23rd Streets, in contrast with the more densely situated buildings across First Avenue. The layout added to the feeling that this community was insulated from the rest of Manhattan. Photo credit: New York Public Library.

Even as demand for Stuy Town apartments crested, MetLife was already making its first appeal to the city to raise rents on future tenants. Citing a 50 percent increase in construction costs—from $60 million to $90 million—MetLife asked the Board of Estimate to approve a $3 increase in the amount it could charge per month per room. In exchange for the bump, Ecker promised to keep the new rents at $17.00 for at least four years. After that, he said that he would regularly seek increases to ensure MetLife’s guaranteed 6 percent return. At a public hearing at City Hall, civic groups asked the Board of Estimate to deny the rent increase unless MetLife agreed to a nondiscrimination clause in its contract. Their efforts were unsuccessful, and the increase went through.¹⁷

Despite the high demand for future Stuyvesant Town apartments, the project’s racist rental policies were giving MetLife lots of bad publicity. Discrimination in housing was not illegal at the time, and the right of an owner to screen prospective tenants for so-called appropriateness was well established. However, this development was unusual because of its size and scale and most importantly because the city was so integrally linked to its creation. There would have been no Stuy Town without New York City condemning the land and offering generous tax incentives and profit guarantees to MetLife. Moses and Mayor La Guardia had moved mountains to get MetLife to redevelop the property, and by approving a deal that so clearly was going to exclude renting apartments to Black people, the city’s Board of Estimate had sanctioned the racial discrimination. At a time when Negro and white Americans are dying on the battle-fields to preserve our Nation, it seems shocking that such a project could even be proposed, said a representative of the Permanent Committee for Better Schools in Harlem.¹⁸

MetLife responded to the controversy—but not by changing its policies in Stuy Town. Instead, the company announced a new, much smaller housing project geared toward African Americans. Called Riverton, it was to be located in Harlem. MetLife executives clearly hoped that this new separate but equal development would mitigate racial and political tensions.

Anger over the Stuy Town project, however, continued to grow. Armed with the support of the American Civil Liberties Union, the American Jewish Congress, and the National Association for the Advancement of Colored People, three Black veterans sued MetLife in 1947, arguing that housing discrimination based on race was barred by the Constitution of the United States and the State of New York. MetLife countered that because it was a private corporation, it had the right to decide the policies—like keeping Black people out—to protect the safety of its investment. Ignoring the $50 million tax abatement that had been given to MetLife by city taxpayers over twenty-five years, MetLife asserted in its legal briefs that Stuy Town had been built entirely with private funds, and not one dollar of public money was used. MetLife also urged the court to consider as a matter of mitigation that it had also recently built the Riverton Houses in Harlem, now occupied principally by Black people. The Black veterans argued that MetLife still could not discriminate in Stuy Town because the entire development was made possible by state action.¹⁹

On July 19, 1949, the New York Court of Appeals—the state’s highest court—decided the question in favor of MetLife, saying that the legislative intent of the Redevelopment Companies Law, which enabled the creation of Stuy Town, was clear to leave private enterprise free to select tenants of its own choice.²⁰ The United States Supreme Court declined to review the case on appeal in June 1950, and MetLife’s racist policies were allowed to stand by the highest court in the land.

Outraged that MetLife was being allowed by the city, and now the courts, to exclude Black residents, some of the earliest tenants of Stuy Town decided to fight back themselves. In a first act of community organizing in Stuy Town, twelve white residents formed a group called the Town and Village Tenants Committee to End Discrimination in Stuyvesant Town. They started to gather petition signatures from their neighbors, objecting to the